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Tech and Creative Industries key to Capital’s growth – CBI/KPMG
Zone(s): UK ¦ Sector(s): Trade, Economy
[18 June 2014, the Confederation of British Industries (CBI)] The technology and creative industries will drive London’s growth in the next five years, closely followed by professional and financial services, according to the latest CBI/KPMG London Business Survey.
- Nearly two thirds of businesses said these sectors (69% technology and creative industries; 65% professional services; 62% financial services) are key to London’s economic growth over the next half decade. Over half of firms (58%) believe that East London (Canary Wharf, the Royal Docks and Stratford) will be vital to the city’s future economic growth, with 44% also rating the City, Shoreditch and Old Street as key engines of growth.
- Optimism about the economy remains high at 65%, easing back slightly from last quarter’s record high of 70%. Half of the 128 respondents are optimistic about prospects for their own firms over the next six months, whilst 79% rate London as a good, or very good, place to do business.
- However, employers ranked retaining key staff, and a lack of appropriately skilled job seekers, as the biggest concerns over the next year. The majority of firms (52%) are increasing headcount, and only 15% are continuing with a recruitment freeze, down 3% on the previous quarter.
- The cost of doing business in the capital also remains a concern. Housing costs were again highlighted as one of the biggest threats to competitiveness. Ahead of next year’s General Election, businesses are closely monitoring issues around infrastructure investment (22%) and the tax environment (22%).
The survey also shows a majority of firms are currently focusing on doing business in the UK (83%), and in Europe (63%), with nearly two thirds (65%) planning to expand their business operations over the next year, up from 64% last quarter. Much of this expansion is set to be domestic in focus, with 35% looking to expand in London, and 32% in London and the UK, but almost one fifth of respondents are looking to expand internationally (19%).